At LvBS International Conference Leading Experts Offer Advice on How to Effectively Manage a Family Business
“The most successful company is a family-owned company, the worst company is a family company, which is badly managed,” a view expressed by Charles Peter, the owner and CEO (fifth generation) of Benninger during a LvBS conference in “Managing a Family Business from Generation to Generation.” The co-organizer of the conference was the international company Ernst & Young.
Charles Peter said that as many family members as possible should be involved in the development strategy and that important issues need to be addressed. “However, if the owner sees that his descendants have no interest in running the company, he should think about selling,” the expert advised.
Ernst & Young (Switzerland) partner Heinrich Christen believes that family companies always have a lot of trust from both employees and partners because they are companies that work on long-term development rather than on immediate profit. “Typically, in a family business the staff is treated well, there are high salaries and good opportunities for growth,” he said.
With regard to succession in family firms in Switzerland, according to the partner of Ernst & Young, usually descendants do not work in the family business for at least 5 years after graduation. If family members are not willing to contribute to the management of the company, one should consider including a hired manager for a period of, say, 5-7 years.
Claude Cornaz, the successor of the Vetropak Group, shared his experience of taking over a family business. He said that someone who is considering entering the family business should answer the following questions: Is this my dream job? Do I have the necessary skills to manage the company? Is this a company where I want to work until retirement? Is it possible to leave the company? Who will point out to me my mistakes?
“It is important and useful to work for some time with one’s predecessor, gradually taking over the management of the company, and to have a clear plan of how the current head will pass over his tasks,” Claude Cornaz advised.
The essential tip from all the speakers was to start thinking as soon as possible about inheritance in a family business, since it is a long and difficult process.
Participants also received from the international experts practical advice on the possible forms of effective management of a family company in terms of tax and fiscal instruments, as well as the possible choices of residence.
The speakers of the conference were international experts with significant experience in the management of their family companies or in consulting – Heinrich Christen, Partner, Ernst & Young (Switzerland); Roger Krapf, partner, Ernst & Young (Switzerland); Claude Cornaz, CEO (in third generation), the company Vetropak; Charles Peter, the owner and CEO (the fifth generation) of Benninger. From the Ukrainian side presented Olga Gorbanovskaya, head of Human Capital group, Ernst & Young (Ukraine) and Albert Sych, Senior Manager, head of legal team of Ernst & Young (Ukraine).